Tack Room Clothing Uses the Retail Method to Estimate Cost

Essay

Tack Room Clothing uses the retail method to estimate cost of ending inventory for its interim reports.From the following facts,estimate Tack Room's ending inventory at cost at August 31.
$$\begin{array} { l r } \text { August } 1 \text { inventory at cost } & \$ 900 \\\text { August } 1 \text { inventory at retail } & 1,200 \\\text { Net purchases at cost } & 9,000 \\\text { Net purchases at retail } & 12,000 \\\text { Net sales at retail } & 12,500\end{array}$$